Post-derecho aid program will help build affordable housing in Marion

MARION — Federal funding to aid recovery from the 2020 derecho and build support for low-to-moderate income housing projects will largely benefit Linn County, including potential future projects in Marion.

Marion Economic Development Corporation President Nick Glew presented the Community Development Block Grant program to the Marion City Council last week.

“We just started talking about this locally because our assumption is we will have a couple local housing developers interested,” Glew told The Gazette. “Not any developer will want to jump into this. There's a long affordability period, a lot of housing requirements … However, this week was about trying to stay ahead with our council and helping them understand what the program is, those affordability requirements and a heads up about some asks coming up in the near time frame for projects in the Marion community.”

The federal block grants disaster funds are allocated to the Iowa Economic Development Authority through the U.S. Department of Housing and Urban Development.

All of the counties involved were highly impacted by the derecho. Linn County will receive 80 percent of the overall $57.6 million, while the other 20 percent — about $11 million — will be used in Marshall, Tama and Benton counties. The IEDA has six years to fully spend the funds.

For Marion and other Linn County communities outside Cedar Rapids, applications will be submitted through the East Central Iowa Council of Governments. The application period is expected to open up in the next couple of months.

According to the approved action plan for the program, the breakdown of the funds within Linn County are as follows for housing:

Through the program, the maximum sale price for single-family homes would be $175,000. There is a $100,000 per unit amount awarded to the developer, $25,000 for disaster mitigation and the buyer would get up to 100 percent of the closing costs paid for, as well as 5 percent in down payment assistance.

Also available is $70,000 in funding for infrastructure such as water and sewer for each housing unit.

The program documents also state that there would be a 15-year affordability period for single family homes. Homes that are resold during that period would have to be sold to low-to-moderate income buyers. If they are not, the homeowner would have to repay the state for the remaining unforgiven balance of housing incentives, according to the plan.

When it comes to new multifamily units, developers would get up to $75,000 per unit, $15,000 for mitigation and $70,000 for infrastructure.

Of these new units, 51 percent must be reserved for households that make less than 80 percent of the area median income. For Linn County that is:

The plan also has a 20-year affordability period for multifamily developments.

Glew told the city council last week that the program isn’t for developers who are “faint of heart.“

“This program is almost identical to programs from the flood days,” Glew told The Gazette. “There are developers who are familiar with the reporting requirements. We have talked with two different developers interested in putting projects forward. There’s an ability to create a neighborhood not just full of 400k homes, but to be really smart in how you create these diverse housing options and price points, to really create the definition of a neighborhood.”

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